The 18th Annual IEEE International Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC'07)
TV IN THE MOBILE OR TV FOR THE MOBILE:
CHALLENGES AND CHANGING VALUE CHAINS
Aurelian Bria
Royal Institute of Technology
Stockholm, Sweden
Patrik Kärrberg
London School of Economics
and Political Science
London, UK
.
ABSTRACT
This paper intends to provide a techno-economic overview of
the Mobile TV business and its business models. Recent trials
have shown that a large number of people would like to
consume mobile TV and few people doubt that this service
will eventually be offered in the majority of wireless
networks around the world. However, this service is not a
simple add-on to the voice and data, but comes with totally
new dimensions that challenge the present markets. The aim
of this paper is to identify and describe these challenges in the
technology, market behaviour, and industry strategy domains.
I.
INTRODUCTION
Several business models deployed when providing mobile
services are vertically integrated setups focusing on
delivering generic content to consumer mass markets.
However, mobile TV is not yet a clearly defined media, and it
has ambiguous connotations, which leaves us with many
questions regarding what kind of services could be delivered,
and how actors will interact in that process. Mobile TV could
replace traditional television when users lack access to a
television set, but we expect it to complement traditional TV
rather than replace it. Initially, as current cases in Japan and
Europe show, retransmissions of existing channels and
programmes will be common, but eventually it will develop
into something more than just “television on the move”. It
will be part of a multimedia device, which emphasises
interactivity and enables users to produce and personalize
content [1].
Mobile TV is not an isolated phenomena, but one of
several distribution channels for IP TV; broadcast to TV-sets,
via the Internet when stationary (desktop), via the Internet
when on the move/nomadic use (laptop) and finally in the
mobile phone. As mobile and fixed Internet formats
increasingly converge, technical service delivery layers
become standardized. “TV in the mobile” is foremost a
technical challenge already solved by several carriers through
streaming solutions (and acquiring of related programme
rights). However, we expect “TV for mobile” (content
customised and broadcast for the mobile format) to alter the
traditional value network around TV content. Most notably
mobile carriers take an active role in both production and
distribution.
In this paper we define mobile TV content as “any video
played on a mobile device”.
1-4244-1144-0/07/$25.00 ©2007 IEEE.
Per Andersson
Stockholm School of Economics
Stockholm, Sweden
The following research questions will be addressed
throughout the paper: a) How business models delivering “TV
for mobile” depends on the underlying delivery technology
and b) How interaction and power relations in the value
network for mobile TV will change from traditional TV?
The expansion of the digital domain consists largely of
the reformatting and translation of content to increase
availability. The digital version of previously analogue media
is characterized by a higher level of “liquidity”, as digital
content is more adaptive, transferable, and accessible to new
platforms. This increased liquidity is one of the main driving
forces behind an increasing mobility of media. Mobile TV
usage will be an integrated part of this media consumption.
The activity areas of actors could be summarized as below:
Content
generation
Content
aggregation
Digital
distribution
Customer
relation mgmt
Mobile network operator
Cable TV company
Newspaper
Terrestrial broadcaster
Production
company
End-user as
content creator
Media Web sites & portals
Content
generation
Content
aggregation
Digital
distribution
Customer relation
management & billing
Figure 1 Actor involvement in mobile TV content distribution
Despite the high expectations regarding market demand and
business growth in the coming years, little data is available on
user behaviour. Trials in Finland, England, Spain, France,
Italy, and Norway, have indicated some commonalities:
consumers generally prefer simplicity and high usability,
mobile TV services should show high technical functionality
and accessibility, content should be adapted to short periods
of viewing time, and complementary mobile services (e.g.
voice calls) should not be negatively affected by the TV
services.
Several studies indicate that consumers expect services
featuring ease of use and familiar content (e.g from the
traditional TV at home). The overall experience must be
appealing, easy to access wherever the user is and not too
expensive. Furthermore, the market, consisting of content
providers, aggregators, distributors etc, requires a standard
The 18th Annual IEEE International Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC'07)
interface towards the distribution channels implemented by
the mobile network operators or broadcasting operators.
Distribution service needs to support effective content
protection, billing of the customer, access control and
tracking functionality for advertisers.
As the boundaries between different media are getting
fuzzier, so are the consumers’ media habits. New patterns of
media consumption are forming. Traditional TV media are
today being sidestepped in favour of browsing the web.
According to the 2006 report by the Swedish Media
Committee, wherein the media habits of 2000 children, young
adults and parents were measured, the time spent on surfing
the internet surpassed that of TV viewing. Therefore, we can
expect that users want to access the same content in different
ways depending on the context, eventually looking for a
bundled service that cover different distribution channels. For
example, the content of a TV program can be viewed via
terrestrial broadcasting while relaxing in a camping site,
through the Internet when connected in a WLAN hotspot at
the airport, or in the mobile when sitting in a bus.
There are multiple technologies for delivering Mobile TV
services, but due to the scope of this paper we focus on the
3G and DVB-H system, as they are expected to dominate in
Europe. We already know that the bit rate performance as a
function of the spectrum allocated for use is almost the same
regardless the radio technology utilized today, and close to
the Shannon bound. There will be no breakthrough by
improving modulation or coding, but spectrum allocation for
the future systems may give competitive advantages to one
technology or another. DVB-H operators might have high
hopes regarding the digital TV switchover freeing up
spectrum in the old UHF band (presently utilized for analogue
TV broadcasting). However, the digital switchover might not
free up any spectrum at all, as the offer of the terrestrial
digital TV systems not only includes more channels, but also
better quality (e.g. HDTV).
DVB-H (Digital Video Broadcasting-Handheld) is
expected among analysts to have the highest percentage share
amongst broadcast technologies in the West: a larger backing
of influential actors, greater degree of activity in terms of
trials and rollouts, and it being supported over the UHF
frequency, which gives it an advantage over DAB/DMB in
terms of performance. Several countries could be expected to
have more than one Mobile TV broadcast standard including
France, Germany, India, Netherlands, UK, US and Japan.
Most notable amongst these is the UK, which is expected to
comprise all the major broadcast technologies: DVB-H,
DAB/DMB and MediaFLO (Juniper Research, 2007). In
Finland, and in the rest of Europe, Nokia has been one of the
main actors pushing forward DVB-H. There are presently
many uncertainties concerning the future market positions
and strategies of: technology suppliers, mobile service
operators, TV broadcasters, service content providers and
others, all aiming for a stable position in the new, emerging
constellations of firms involved in developing and
distributing mobile TV services.
Figure 2 Interactive mobile TV (Source: NTT DoCoMo)
II. WHAT IS MOBILE TV
As mentioned in previous section, there are two ways to relate
to the term and concept of mobile TV: TV in the mobile or TV
for the mobile. TV in the mobile simply implies that
traditional TV content is re-broadcast in the mobile phone.
The content is not produced with the mobile platform in
mind, but rather just compressed and perhaps shortened
versions of traditional TV content as news, sports, music
videos etc. In early trails and launches this has been the
clearly dominating form of service. In the US, for example,
the mobile TV service MobiTV streams over 25 traditional
TV channels over the cellular network. Swedish pilot studies
have also replicated regular TV programming, but it soon
became clear that the content is simply not adapted to the
usage situations of an outside-of-the-home, mobile viewer.
Produced for big screens and long viewing time, the majority
of the content in traditional TV channels cannot be presented
on small screen devices with limited battery life, resulting in
poor value and convenience for the consumer. TV for the
mobile is an alternative view to mobile TV, namely that
content is produced and optimized for the mobile platform
and the mobile user situation. This means content that can be
clearly reproduced on the small screen (e.g. mobile phone
size), it is enhanced with interactivity features, and its length
is adapted to the consumption pattern of the mobile users.
The main trends that justify this broader definition of Mobile
TV are mainly:
• The user experience when watching TV is changing
from a synchronized and scheduled pattern to a more
personalized experience thanks to technologies as
Personal Video Recorders (PVR) and IPTV that
allows recording of content and time shifting.
• Video on Demand (VOD) is more and more popular,
exactly because it allows personalization of the
service.
• Mobile TV presently grows independently from the
technologies for distribution (cellular, broadcasting,
IPTV).
III. TECHNOLOGY CHOICE
The technologies can be categorized into two groups: the ones
that use the cellular network for delivery (e.g. HSDPA and
MBMS), and a separate broadcast network for mobile TV
(e.g. DVB-H [5]). In the case of delivery over the cellular
network, unicast and broadcast mobile TV traffic would be
The 18th Annual IEEE International Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC'07)
shared with voice and data traffic in the existing networks.
Providing TV by streaming over dedicated cellular
connections (e.g. HSDPA) has a big limitation: a rapid
consumer adoption could rapidly exhaust the available
spectrum for 3G systems. A separate broadcast network
would require a terrestrial transmitting network especially
designed for broadcasting.
The five main network operators in the UK (3UK, O2
Orange, T-Mobile and Vodafone) favour the open DVB-H
broadcasting standard, even if the UHF spectrum, currently
used for analogue television, will not be available for other
uses on a national scale until 2012 [3]. The adoption of
mobile broadcast technologies is dependent on the availability
of spectrum, gradually opening up in Europe and the US after
2010. Meanwhile an opportunity window exists for Western
carriers to further trial and launch streamed TV services on
their 3G networks. Approximately 30% of operators in OECD
countries provide an option for 3G unlimited flat rate data
services. Almost all operators provide both capacity-based
and flat rate tariff plans in parallel. For data centric operators
in Japan and Korea, flat fees have already disseminated well
in the market, with more than 50% of subscribers in Japan
utilizing this option [4]. However, streamed TV services
(based on progressive download mechanisms) never became a
notable revenue source for Japanese operators, and broadcast
technologies are currently the total focus for these operators.
In the UK, several trials have taken place of DVB-H and
Qualcomm’s MediaFLO. Additionally a commercial launch
of DAB/DMB based services took p lace by Virgin Mobile in
October 2006. Virgin Mobile utilizes a DMB based solution
and BT Movio’s broadcast technology. Streamed TV, offered
by all UK carriers, have shown better user penetration, even if
high fees keep it from reaching high volumes.
Figure 3 Features of distribution technologies
IV. VALUE CHAINS IN MOBILE TV
As mobile TV becomes a reality it will change how and when
we watch TV. But how will it affect the current players in the
TV market?
The main actors in the value chain of TV are content
creators, broadcasters and distributors. As aggregators of
content the broadcasters are the central players of this value
chain. However, there certainly are revenue streams from
outside parties at all instances of the value chain as there is a
sliding scale of how viewers pay for content;
Figure 4 Users pay with time and money for content
At one end we have traditional advertising, product
placements and advertiser funded programming, where the
viewer pays by being exposed to such messages. On the other
end of the scale there are pay-per-view, subscription and
carriage fees, where the viewers pay the bill by themselves.
Content creators, for example studios and production
companies, receive an increasing part of revenue from
advertising end of the scale. Distributors, for example cable
networks, get their cut mainly from subscription fees and PayPer-View end of the scale. Broadcasters tend to generate
revenue from the whole scale.
A. Impact of new technology on industry structure
How will a new technology like mobile TV affect the current
market structure? As in all commercial undertakings there is
one dominant question; who will control the revenue streams?
As mobile network operators are used to having control over
their customers’ behaviour they are likely to represent a new
breed of distributors. Traditionally, the broadcasters have had
revenue streams from all parts of the value chain, while the
distributors’ revenue streams have mainly come from
subscription fees and the like. Most of the traditional
distributors’ revenue can be allocated to the technical service
of providing the signal and not the content per se. As mobile
network operators currently tend to operate as gatekeepers for
access to Internet content outside their own system there is
also a very real possibility that they will try to extend their
control over mobile TV services as well. This opportunity is
enabled by the need for interactivity features in mobile TV,
interactivity that will most probably be provided using the
uplink of the cellular networks.
Traditionally, TV has largely been defined by the
linearity of the scheduled content. Scheduling at specific
timeslots has had tremendous effects on society at large as it
has had a scheduling effect on how people plan and live their
lives. Primetime series has been a way to gather the family.
News broadcasts at specific times has been must see TV for
decades. However, this linearity has been disrupted by the
appearance of digital video recorders as they have brought
with them the ability to time shift on the fly. Thus have the
traditional way of consuming TV started to change. Mobile
TV can therefore be seen as a way of extending the traditional
way of watching TV as it to some extent lessens the need to
time shift contents. With the emergence of mobile TV there
The 18th Annual IEEE International Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC'07)
will be disruptions in the traditional value chain. The
broadcasters’ role as aggregators of content could be said to
be constant, but the mobile network operators will be a new
type of distributor. When it comes to content mobile TV can
be seen as an extension of traditional TV, but due to different
viewing patterns there seems to be a need for a new type of
content. The notion of brand must also be taken into account.
Mobile TV is a potential playing field for any number of new
media actors. In all the trials, however, the same channels that
are popular for regular TV are popular for mobile TV.
Viewers seem to prefer the strong brands, built up with
regular TV.
Two variables seem to control the future market
development: the flexibility in content delivery demanded by
consumers and the level of cooperation between companies.
As converging media landscape changes consumer
behaviour and leads to a reorganization of the industry,
companies will attempt to either prevent the media
convergence or adapt their business models accordingly. The
increased liquidity of information enables consumer’s
constant access to information through several channels.
Cooperation of market actors is crucial for delivering
services of high quality with the minimum of resources. For
example, NTT DoCoMo and Nippon Television Network
(NTV), the terrestrial TV operator, have agreed to a business
tie-up to develop content and related services that will
combine mobile communications and conventional TV
programmes. Currently only broadcasting companies with
existing licenses for terrestrial broadcasting can provide
content, but in 2008 it is expected that also carriers and other
media companies will be allowed to broadcast. In particular,
these two companies will jointly study new business
opportunities such as a service that will combine One-Seg and
i-mode services [3]. It is currently possible to watch TV and
access the mobile Internet. A football game and
simultaneously access to interactive content, such as voting
and in-depth information about the teams, is shown in fig. 2.
It is not enough that carriers and content providers
cooperate, but for example, also manufacturers of mobile
phones have to be involved. It is reasonable to think that this
kind of cooperation can be achieved when a “win-winsituation” is not only talked about, but actually practiced
among players in the industry.
B. Charging for mobile TV
Another important aspect is the fact that consumers accept
that they will be charged for services provided through their
mobile phones. This acceptance gives the mobile network
operators a power advantage over the broadcasters, as they
have the power to grant access to a customer base that are
expecting and willing to pay for a service like mobile TV. If
they wield their power right, mobile network operators may
take hold of all revenue streams that are not related to
advertising. As the number of mobile network operators are
very low in comparison to the number of broadcasters there is
a very real risk that they will only open up their network to
broadcasters that will abide to their rules. However, as the
current structure of intertwined relationships between content
creators and broadcasters are very strong and complicated it
seems unlikely that the mobile network operators will be able
to circumvent this structure by starting their own mobile TV
channel (if the regulator allows this).
The content will be the main focus for the customers, but it
may happen that the need for service personalization goes so
far so the majority of users require from mobile operators
only a bit pipe to the wanted content source (e.g. similar to
Internet radio/TV today). Consumers gaining cheap access to
Internet content using the mobile networks will determine the
operator loosing control over the distribution channels.
Already the mobile operators are concerned about bandwidth
consumption as a result of technological innovations which
allow users to produce and access their own mobile TV
services. For example, software as Windows Media Encoder
or devices such as the Slingbox allow users to stream video
from their home (PVR, TV, DVD,etc.) over the Internet and
mobile networks.
C. Regulation for user choice important
Another important factor is to what extent the regulator will
allow for new distributors to broadcast to end-users. Taking
into account that mobile TV is a relatively new and
innovative service type (enabling new value network
constellations) the regulator is a very important actor. Their
role in regulating e.g. the protection of the public, and the
promotion of cultural diversity and pluralism of the media,
will affect the introduction and success of mobile TV service.
Content creation has up till now not been the strength of
carriers. This leaves room for new actors (such as production
companies or even advertisers) to side-step the traditional TV
distribution companies. It would however depend on the
regulatory framework and the network operator (DVB-H or
3G) policy. There is also a real possibility that the legislative
power will be in favour of increased competition. One way is
force the network operators to open up to the service
providers. Another way is to push for virtual network
operators (VNO) for mobile TV. A virtual network operator
would be more inclined to compete by offering a wide range
of services and content, as they would have no other revenue
that could subsidize their operations.
The success of 3G in the mobile TV arena (regardless if is
implemented with point-to-point HSDPA or cell broadcasting
MBMS) is heavily dependent on the future regulator policy in
allocating spectrum. Most operators have 2 classes of
frequency, paired and unpaired, with the paired being
reserved for 2-way services such as voice and interactive data.
The unpaired part is supposed to be used for asymmetrical
services such as data, but is mostly unused. In most countries,
the unpaired spectrum is sold together with the 3G spectrum.
For firms, new technological developments such as fixedmobile convergence may create new incentives for vertical
The 18th Annual IEEE International Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC'07)
and horizontal integration and disintegration. Regulatory
oversight may remain necessary to monitor for anticompetitive behaviour at all levels of the value chain,
including access to content and to networks.
models and services are adapted to the mobile use case, in
order to provide and preserve user value.
D. Actors to support user acceptance of “TV for Mobile”
Another way of increasing the likelihood of a successful
subscription business is to try to expand the traditional way of
watching TV. One way to do this for the mobile networks
operators is to cooperate with pay-tv broadcasters or
distributors as those customers who already have these kinds
of subscriptions are quite likely to be interested in accessing
their premium channel on mobile TV as well. As this would
be an add-on channel package that are linked to their regular
home subscription the payment would most likely go through
the none-mobile TV distributor. Hence, would the power over
the revenue stream once again be in the hands of the
broadcaster.
Mobile TV is a new service that has the potential to change
the present market for mobile services. The main challenges
are not related to the quality or capacity of the available
technologies, but rather the complex question of who will pay
for, use, own and control a mobile TV network. At present
there are many issues to resolve in order to make the actor
network invest together and develop a complete service
package that consumers are willing to pay for. Two future
paths and scenarios are clear, one where mobile TV is
broadcasted mainly over a dedicated broadcast network
similar to traditional TV today. The other is a solution that
uses the existing mobile networks that with some upgrades
could support a “broadcast-like” service. DVB-H might
provide options for broadcasters and carriers to collaborate on
technical hybrid solutions with broadcast streams being
synchronised with mobile Internet usage (as in the Japanese
case). We argue that mobile TV is a complement to
traditional TV but reconfigurations of existing value chains
don’t happen without friction. There is a real opportunity for
the regulator to bring clarity regarding standards and
interoperability. Powerful actors, such as carriers and the
media industry’s content providers must agree on business
models that support this new ecosystem. To successfully
create “TV for mobile” adapted to mobile users real needs,
incentives for all actors in this ecosystem must be clear.
E. Value Chain Integration Case:
Commerce and TV Going Mobile Together in Japan
A saturated market for mobile services and voice calls is a
major reason for mobile carriers in Japan to focus their future
efforts on mobile transactions. NTT DoCoMo even took a
20% stake in leading credit card company Mitsui Sumitomo
in 2005. Mobile commerce was estimated to exceed Euro 2.8
billion in Japan in 2005 and more than an estimated 40% of
users shop by ordering items through their mobile phone and
women more so than men [4].
In Europe it has been seen as important to enable
subscription fees to capitalize on mobile TV and recoup
infrastructure investment. However, in Japan with an
expected 10 million mobile TV enabled handsets being
shipped up to the summer of 2007, the focus lies on
advertising and potentially mobile commerce. Mobile wallet
owners are expected to have nearly tripled from 2005 to some
37% of all users in 2006 (Impress, 2006), and continue to
grow. Keeping in mind that 40% of mobile users already shop
with their mobile phone, analysts and industry organizations
expect that mobile TV and its synchronized mobile sites (by
the EPG), could boost mobile commerce further.
The focus of mobile applications in Japan are said to
change from “whenever and anywhere” (DoCoMo in NTT
DoCoMo plays with the Japanese word for “anywhere”) to
“immediately and on the spot”. Adaptation of PC services for
the mobile phone has for a long time not being seen as
meaningful in Japan by content providers, where the focus
instead is on developing services suited to the mobile user’s
specific needs. So even if value and service integration are
key to mobile service innovation, it is crucial that business
V. SUMMARY AND CONCLUSIONS
ACKNOWLEDGEMENTS
We would like to thank our thesis students Guan Wang and
Johan Englund for their help with data collection and
organization, interviews and the valuable discussions.
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